FHWA, FRA, and FTA Finalize NEPA Implementing Regulations, Effective September 1, 2026

What the rule does

The Federal Highway Administration (FHWA), Federal Railroad Administration (FRA), and Federal Transit Administration (FTA) have finalized revisions to their National Environmental Policy Act (NEPA) implementing regulations, with the final rule effective September 1, 2026. The rule finalizes an interim final rule (IFR) published on July 3, 2025 (90 FR 29426), making minor technical changes in response to public comments and additional agency review. The affected regulations are 23 CFR part 771, 49 CFR part 264, and 49 CFR part 622. The rule has been designated economically significant and spans 21 Federal Register pages.

Background and rationale

The agencies explain that 23 CFR part 771 (Part 771) was originally promulgated in 1974 based on FHWA's NEPA guidelines first issued on November 30, 1970, and was subsequently treated as a supplement to the Council on Environmental Quality (CEQ) regulations issued in 1978. That supplemental relationship ended when Executive Order 14154, Unleashing American Energy (90 FR 8353; January 29, 2025), rescinded E.O. 11991, which had directed CEQ to issue NEPA implementing regulations and required federal agencies to comply with them. CEQ's regulations were removed effective April 11, 2025, and CEQ finalized the withdrawal through a Final Rule issued January 8, 2026 (91 FR 618). As a result, the agencies removed cross-references to the former CEQ regulations from Part 771 through the IFR, and the document states that "the Part 771 regulations stand on their own."

Statutory drivers: BUILDER Act and IIJA

In addition to addressing the CEQ regulations' removal, the final rule incorporates amendments to NEPA made by the Building United States Infrastructure through Limited Delays and Efficient Reviews (BUILDER) Act of 2023 — enacted as part of the Fiscal Responsibility Act of 2023, Public Law 118-5, Div. C, Tit. III, Section 321 (June 3, 2023) — which the document states streamlined the environmental review process for all federal agencies. The rule also reflects amendments to 23 U.S.C. 139 and 203(e) regarding efficient environmental reviews that were included in the Infrastructure Investment and Jobs Act (IIJA), Public Law 117-58 (November 15, 2021), and that apply specifically to these three agencies.

Key technical changes

Beyond removing CEQ cross-references, the agencies made several targeted technical changes. Relevant authorities in 23 CFR 771.123(b)(1) were updated to read "23 U.S.C. 139(f), 168, 169, 23 CFR 450.212, 23 CFR 450.318, or 23 CFR 450 Appendix A, as applicable." Nonsubstantive grammatical or clarity changes were also made to 23 CFR 771.101, 23 CFR 771.138, and 23 CFR 771.113.

A more substantive technical correction updates the monetary thresholds for FHWA and FTA categorical exclusions (CEs) for projects receiving limited Federal assistance, at 23 CFR 771.117(c)(23) and 23 CFR 771.118(c)(13). The document explains that Section 11317 of IIJA amended Section 1317(1) of the Moving Ahead for Progress in the 21st Century Act (MAP-21), 23 U.S.C. 109 note, adjusting these limits effective in the fiscal year of October 1, 2021. The previous figures of "$5,000,000" and "$30,000,000" have been replaced with "$6,000,000" and "$35,000,000," defining the CE as applying to: (1) projects receiving less than "$6,000,000" of Federal funds, or (2) projects with a total estimated cost less than "$35,000,000" and Federal funding of less than 15 percent of total estimated project cost.

Comment process and scope

The agencies received 1,991 comments in the docket in response to the IFR, of which 244 were unique. The comment period was 30 days. The agencies state that many comments proposed substantive edits and changes to Part 771, but that such changes were outside the scope of this rulemaking, which is limited to technical changes; those comments will be retained and considered for future rulemaking efforts. The agencies also note they may seek future changes to Part 771 through a deregulatory rulemaking effort to further expedite the environmental review process and reduce additional burdens on regulated parties.

What to watch

The final rule takes effect September 1, 2026. The document indicates the agencies are considering a future deregulatory rulemaking effort to further revise Part 771, and substantive comments submitted in response to the IFR have been preserved for that process.

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